In 2008 and 2011, Ethiopia's growth performance and considerable development gains were challenged by high inflation and a difficult balance of payments situation. Inflation surged to 40% in August 2011 because of loose monetary policy, large civil service wage increase in early 2011, and high food prices. For 2011/12, end-year inflation was projected to be about 22%, and single digit inflation is projected in 2012/13 with the implementation of tight monetary and fiscal policies.
Agriculture constitutes around 85% of the labour force. However, the service sector represents the largest portion of the GDP. Many other economic activities depend on agriculture, including marketing, processing, and export of agricultural products. Production is overwhelmingly by small-scale farmers and enterprises, and a large part of commodity exports are provided by the small agricultural cash-crop sector. Principal crops include coffee, legumes, oilseeds, cereals, potatoes, sugarcane, and vegetables.